Michonne is sizing him up and probably is familiar with molon labe - she's an awesome sword fighter.
Maybe she is - but we haven't seen that demonstrated yet. Or did I miss an episode where she did more than chop a couple of slow-shuffling zombies?
Merle has his own agenda - and it begins and ends with getting even with the people who left him on that rooftop. He may have teamed up with The Governor as a matter of convenience, but now that he's met up with Andrea and knows Rick & Company are still around, he's updating his plans accordingly. The only question is will he enlist The Governor's aid somehow, or go it alone? (Will we
ever find out why he sawed off his hand rather than the pipes or the cuffs?)
Look for Merle and Daryl's eventual reunion to be awkward. Daryl will be torn between brotherly ties to his older brother and loyalty to Rick's bunch that he's been with for over a year now. I figure one of them will kill the other . . . or get bitten by a zombie and have to be put down by the other.
Of course, if they get a new writer, things can go off the rails entirely . . .